F&I

Mobilization Nation

Research firms have predicted in recent years that mobile Internet usage could outpace desktop usage within five years. In response, more and more technology companies have introduced new solutions to help dealers take advantage of the mobile marketing phenomenon. Sure, they want to stay ahead of usage trends, but they also believe the mobile realm can deliver a better connection to consumers.

Blazing the trail on the dealer side is Bob Germain, vice president of Germain Motor Co., a dealer group with 18 locations dotting Ohio, Florida, Arizona and Alaska. Germain, who professes to be on the trailing edge of technology, says his Naples, Fla., location’s entry into the mobile world is more about tapping into a cost-effective, metric-wrapped way of communicating with his customers.

“The guys around here make fun of me because there’s still a RAZR phone sitting on my desk,” he says. “But even for a guy like me — an old-school dealer who is all about expense control and watching inventories — the chance to reach customers in real-time, well, there’s nothing more efficient than that.”

The vehicle driving Germain Motor Co. forward is MobiDrives. The Fort Lauderdale, Fla.-based company was founded last year by Peer Snoep after he spent an afternoon playing phone tag with a dealership’s service advisor while his vehicle was being repaired. Snoep figured that a platform that allowed dealers to manage dealership-branded mobile apps would be a faster and more effective approach.

Snoep’s quest eventually led him to Jim McDavid, a 30-year veteran of the automotive industry and former executive of JM&A Group. McDavid, who specializes in income-development strategies for dealers, says the fixed-operations application caught his attention right away.

“What we’re bringing to the table is going to revolutionize how dealers communicate with customers,” says McDavid, noting that the MobiDrives platform can connect to more than 51 dealership management systems. “The pot of gold at the end of the rainbow is creating loyal customers who, every time they think about buying, servicing or recommending where to buy a car, will think about your dealership.”

Having worked with McDavid during his days at JM&A, Germain agreed to meet with MobiDrives and listen to the pitch. The dealer was immediately sold on the platform’s ability to push out real-time specials to consumers. What he saw was a chance to replace an age-old way of reaching car buyers: direct mail.

“Direct mail has been almost addicting to our people,” Germain says. “But what you’re really doing with direct mail is a very inefficient way of keeping in touch with your customers.”

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The Mobile Effect

With personnel and advertising expenses accounting for 50 percent of every dollar of gross profit his dealerships make, Germain sticks closely to a $400 per car advertising spend. He says his dealerships are slowly recovering from a 30 to 40 percent drop in volume last year. Actions taken in 2009 by management, such as combining jobs and cutting inventory levels, have his stores on pace to make the same kind of money they made in 2005 and 2006.

“When things bottomed out a bit last year, we had made enough changes where we were a lot more efficient and our net-to-sales percentage was a lot higher than it had ever been,” says Germain. “MobiDrives fits right into this new way of doing business. It allows us to generate more gross profit for a lot less investment.”

Mobile marketing is still the new kid on the block. A recent ABI Research report on consumer buying habits found that spending on mobile initiatives barely registered. But marketers tend to focus on stats like the one that says six mobile phones are sold for every computer purchased. They also see the stat Morgan Stanley showcased at a technology conference in April: The firm projects that mobile Internet usage will surpass desktop Internet usage sometime between 2013 and 2015.

Mobile marketing isn’t new to the auto industry, either. Toyota, for instance, employed a location-based mobile marketing campaign during the New York Giants’ 2009 home opener. It was part of Toyota’s “It’s a Good Time to Sign” campaign, and the goal was to drive traffic to local dealerships.

Attendees of the game were given handouts with 2D barcodes, which allowed them to engage with the automaker during the game. The fans simply used their camera phones to take a photograph of the barcode and used that photo to access vehicle specials at Toyota’s greattimetosign.com mobile Website. Attendees also could enter to win autographed Giants merchandise. The marketing strategy resulted in a 9.2 percent fan engagement, which most marketers would agree is a huge success.

Ford, Volkswagen and Honda also have tapped the mobile Web to promote their brands. “Companies like Ford and Toyota have used mobile marketing. I wouldn’t say extensively, but they’ve been among the earlier pioneers,” says Neil Strother, who oversees ABI Research’s new Mobile Marketing Strategies service. “But when you’re talking about it at the dealership level, I think it is a newer phenomenon.”

Strother prefers a hybrid approach. He advises dealers to get their feet wet with a mobile Website before choosing a secondary platform, be it mobile applications or texting. “Having a mobile site at least avails customers of ways to get to your products and services on a mobile device,” he says.

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Consumers’ attitudes toward mobile advertising are changing as well. After a little more than a year, ABI Research found that willingness to accept mobile marketing offers rose 9 percent in 2009. Those “completely opposed” dropped by six points.

Nicole Case, director of Reynolds Web Solutions, throws out one precaution. “There is a cautionary piece to this, which is you have to be careful about how and how often you do that marketing on such a personal level,” she says. “If I bought a new car and you send me a new-car offer, I don’t care how good it is, I’m kind of irritated that you sent me an offer when I just bought a car.”

Tech Companies Taking Different Approach

Reynolds has made a big investment in the digital marketing world in the last year and a half. The approach centers on its WebMakerX 2.0 platform, which links to the company’s POWER and ERA dealer management systems and promises to provide dealers with a solution that will allow them to manage their entire digital marketing strategy — from Websites and social media strategies to mobile sites. The platform can work as a standalone solution as well.

Features of Reynolds’ mobile marketing solutions include Short Code Marketing, Mobile Re-direct, which directs users to a dealer’s mobile site, and Send-2-Mobile, a feature allowing consumers to send vehicle searches conducted on a desktop to their mobile phones.

“There’s some confusion out in the market because social media is so hot right now, so the power of mobile is getting lost in those messages,” Case says. “With social media, you’re building a relationship. With mobile, you can do the same, but you have the opportunity to get sales leads immediately.”

ADP Dealer Services is following a similar path, but its mobile push centers on executives and managers. The company’s Drive DMS for Mobile allows dealer executives to manage their stores remotely by connecting their mobile phone to key stats stored on the DMS.

“I like to think of our solutions in two separate buckets: One is the mobile marketing piece, or business-to-consumer piece, and the other is the business-to-employee piece,” says Dave Nash, vice president of product marketing. “The beauty of ADP Drive for Mobile is, because it’s a free app for our clients already using the ADP Drive, it’s a productivity enhancer that saves them time without requiring a major investment.”

And like Reynolds, ADP is taking advantage of text messaging to allow dealers to send service notifications and promote specials. It’s not as sexy as mobile Websites and applications, but Nash said texting is the only way dealers can reach all mobile consumers.

“Since we’re a global company, we have a worldwide view of things,” says Nash. “And from our experience, texting is a great unifier because it’s used worldwide, and it really is the broadest way to reach everybody.”

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The New Wave of Mobile Apps

MobiDrives is taking a starting-from-scratch approach. Company leaders believe that mobile apps are the new mobile Website. The same ABI Research poll that measured consumers’ diminishing opposition to mobile marketing found that the number of people who said they accessed Websites at least once a day through their mobile phones increased by 12 percent last year. The increase in Web surfing is driven by the rise in ownership of 3G smart phones, which captured approximately 81 percent of all handset shipments last year.

John Leaver, MobiDrives’ director of field operations, says there are other factors driving MobiDrives’ approach as well.

“Apple has really taken a front stage in technology,” Leaver says. “The key for them is they start everything simple, and then take out what they don’t need from that simple idea until they get to a very refined product. And that’s what apps are — very streamlined, very useful and relevant pieces of software. Mobile Websites aren’t that way, because there’s a lot of images and a lot of code to load. They’re kind of yesterday’s technology.”

Apple CEO Steve Jobs would probably agree. He saw potential for advertising opportunities among the more than 185,000 applications on the Apple App Store. In April, Jobs unveiled a new mobile platform called iAd. The new solution allows third-party developers to directly embed advertisements into their applications. Jobs promises the new platform will deliver the interaction of Web ads and the emotion of television ads.

“When you look at a mobile device, it’s not like the desktop,” Jobs said in April. “On the desktop, search is where it’s at. But on mobile, search hasn’t happened. What’s happening is [people] are spending all their time on apps … and this is where the opportunity to deliver advertising is.”

Kelley Blue Book officially entered the mobile app realm when it launched its kbb.com app on May 18. The app went live in April and garnered more than 66,000 downloads in one month. Andy Lapin, KBB’s product director for Mobile, said the move was more about keeping up with competitors than anything else.

“Morgan Stanley is predicting that around 2014, mobile traffic will be more than desktop traffic. Do I believe that? I don’t know,” he says. “Let’s say they’re right. Do we really want to be waiting until it’s too late to get into this, or do we want to be there in 2013 or 2014, whatever it is, with three years under our belt of learning how people are interacting with applications, learning how we can make money off of these applications?”

Lapin’s point is that dealers can’t expect these new-wave marketing opportunities to deliver marketing home runs. He will say, however, that dealers still need to take chances and see what works. That’s exactly what Germain is doing with MobiDrives. The goal this year, the dealer says, is to find as many ways to get his branded mobile app on the phones of his customers, whether it’s in F&I at the time of delivery, service department, parts counter, the showroom, or at other venues. He’s even tossed around the idea of preloading Blackberrys with his app for a free phone promotion.

“The thing about MobiDrives, when you have the application on someone’s iPhone or Blackberry, it basically says to them that we’re making a commitment to be their dealership for everything they need,” he says. “We think this is where the industry is going, and we want to be out there ahead and get a jump on our competition.”

Software experts Jason Barrie and Marie Knight share advice for dealers and F&I professionals seeking new ways to drive production and enhance customer service in a department whose future is difficult to predict.